Card Merchant Transaction Fees And Charges

Card Merchant Transaction Fees And Charges

You should shop around and check the costs of accepting card payments.  Banks apply different charges depending on a wide range of factors, including the overall value of card transactions and the bank's assessment of your exposure to card fraud.  Providing banks with thorough information about your business is an important part of setting up a card-payment system.

Remember that you are likely to be charged differently for credit card and debit card transactions.  Credit card and charge card charges can range from less than 2 per cent to as much as 6 per cent of the value of each transaction.  Debit cards are more likely to charge a flat rate of a few pence per transaction regardless of its value.  It costs more to process payments made with SOLO and Visa Electron cards - some businesses decide not to accept these cards.

In addition to transaction charges, other costs you may face include the following:

• A monthly fee if you rent the terminal that is used to accept a Chip and PIN transaction, swipe cards or key in card numbers from your bank.
• A service from a payment service provider (PSP) can be used to process transactions on your behalf, and is most likely to be used for internet transactions.  PSP charges can be on a per-month or per-transaction basis.
• Banks can ask high-risk businesses for a security bond to cover the costs of unauthorised transactions that are refunded later.  Criteria can include the amount of online trading you do, average transaction values and the length of time it takes to fulfil an order.

If you rent your terminal, your bank will have upgraded your equipment to deal with the Chip and PIN.  However, if you own the equipment you may need to upgrade the hardware and software yourself.  Ask your terminal supplier for details.